100% No Money Down Loans Still Available

100% No Money Down Loans Still Available

A New Jersey USDA Guaranteed Rural Development Home Mortgage Loan is a flexible no down payment government insured program that is growing in popularity for rural areas of Missouri. It’s designed to promote home ownership for residents with low to moderate incomes and who have limited savings for a down payment. The USDA loan will actually lend up to 103.5% of the home’s appraised value and even allow the buyer to include closing costs in the actual loan (appraisal permitting). A common misconception about the USDA loan program is that it’s for farmers, but you’ll find many suburban areas qualify for this program.

Benefits of a USDA Home Loan:

• 103.5% Financing
• No Down Payment
• No Mortgage Insurance
• Great Low Interest Rates
• Loan Amounts up to $417,000
• No Cash Reserve Requirements
• 6% Seller Contribution Limitations
• 100% Gifted Closing Costs allowed
• 30 year low fixed rate loan
• No Prepayment Penalty
• Primary Residents only (no rentals/investments)
• Possible to roll closing costs into the loan
• Non-borrowing spouse must now disclose his/her debt even if not on the loan

To qualify for this loan program, there are two notable requirements that differentiate this program from an FHA or VA loan program.

1. Location:

The home must be located in a New Jersey designated rural area

West Milford NJ  is eligible for USDA Rural Development. But there are other in NJ that have some areas that are not eligible or are completely ineligible. Click the link above and check the home you are interest in to see if your next new home is eligible for a zero down payment mortgage.

2. Income Limits:

Must meet New Jersey USDA adjusted annual household income limits- a maximum 115% of the median income for your area. Meaning your total combined household income cannot be more than this amount.

Qualifying Income: It’s important to note that USDA uses two types of income for qualifying. Household income is the combined adjusted gross income of all people living in the home, regardless if they are applying for or will be on the mortgage. This amount cannot be higher then the county limits listed above. The other income used is the Repayment income. This is income from the actual loan applicants and determines the DTI (debt-to-income) ratio.

Maximum Loan Amount: USDA has not set a maximum loan amount but $417,000 seems to be the consensus by most lenders. Your max loan amount will be determined by your DTI (Debt to Income) ratio. USDA has set 29/41% as the max DTI, but often allow up to 47% with a GUS automated approval and a FICO score over 660.
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